The most depressing forecasts seem to be the most accurate.
By Daniel at 4 January, 2009, 11:13 am
Clarity of vision is in short supply by all including economists, however, this collection profiled here is more right than wrong. Shall we recap a portion of 2008?
1. Housing bubble collapse.
2. 400+ trillion derivative/credit default swaps worldwide
3. Switzerland’s Krono disappears for all practical purposes because of overboard investment in collaterized debt securities.
4. Bernard Madoff already contributing to a man’s death over his and others greed. Greed, perceived entitlement, and market manipulation runs the market now, soon fear will rule.
5. The resets on ARMs in 2009 is the other shoe to drop on home foreclosures.
6. The farmers are worried that loans they depend on might not be available to buy their seed/fertilizer. Reduced planting into soybeans from corn already under way. Being breadbasket of world don’t mean jack if can’t plant.
7. Large wave of retail bankruptcies and store closures (73,000) predicted in early 2009 by retail association. (Provided by WinstonSmith2008)
8. At least one US auto manufacturer will declare bankruptcy with ripple effects throughout the economy (2009 auto sales are projected to be 9 million vs 17 million in 2007; at least one manufacturer won’t survive that). (Provided by WinstonSmith2008)
9. Massive commercial real estate issues. (Provided by WinstonSmith2008)
10. State budgets are in turmoil. Expect large layoffs of state employees, especially around May/June. (provided by bharper5)
Any one of these issues above would spell trouble for the market. Combined into one-year dwarfs the depression years for the simultaneous effect of all happening at once. Safeguards built into the markets you say, NOT. No one knows where we are going, but the train is on the track, and it is not being held back, nor coming back.
Everyone in the country (and the country itself) are leveraged to the max, with nothing saved for a rainy day, much less the ultimate rainy day.
You may want to read this as well : How To Properly Monitor The Market In 2009
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